Business relationships are built on trust. When when you transact business with someone who does not live up his or her end of the bargain, not only is that trust lost, you are also left to deal with the negative consequences. While most of us do not relish going to court over business matters, sometimes civil litigation is the only way to protect your interests.
Court Finds “Special Relationship” May Apply to Breach of Contract Case
Consider a type of business relationship that most of us are familiar with: a customer and an insurance agent. In a recent case from upstate New York, a man sued his insurance agent for negligence and breach of contract after he failed to procure the specific type of policy he required. As a result, the man faced losses when the event he required insurance for occurred.
The circumstances of the case are somewhat unusual. The plaintiff was described in court records as a “self-employed logger who is also engaged in the business of putting on rodeos.” With respect to the latter, the plaintiff asked the defendant, his longtime insurance agent, to obtain liability insurance for his rodeos.
In 2012, the plaintiff staged a rodeo in Pennsylvania. The defendant obtained an insurance policy to cover the event. Unfortunately, there was an incident. At the end of the rodeo, four bulls escaped while being loaded onto the plaintiff's trailer. The bulls injured several bystanders. The bystanders proceeded to file lawsuits against the plaintiff.
The plaintiff then learned his insurance policy did not cover these lawsuits because there was an exclusion in the policy “for injuries or damage caused by animals.” The plaintiff also learned his automobile insurance policy would not cover the lawsuits because the specific truck he used to transport the animals was not a “covered vehicle.”
The plaintiff blamed the insurance agent for these gaps in his coverage and sued him in Broome County Supreme Court. Although the trial judge granted summary judgment to the defendant, the Appellate Division, Third Department, reversed and returned the case for trial. The court explained that “an agent may be liable for failing to provide appropriate advice in circumstances where there is a special relationship.” In this case, the plaintiff had done business with the defendant for six years. The plaintiff testified he did not understand insurance matters and relied completely on the defendant's judgment. The defendant “acknowledged that the presence of the animal exclusion in the [rodeo insurance] policy was an error” on his part. Given this, the plaintiff could proceed with his claim that the defendant's negligence was responsible for his losses related to the rodeo incident.